YuMe has got some new research showing that online video viewers prefer ad-supported content over actually paying for content in a pay-per-view or subscription-based model while using their connected TVs along with a lot of other good information in The Who, What, When, Where, Why and How of Connected TV & Advertising. So, while they say time is money, it seems that money trumps time when it comes to avenues to see online video content.

Methodology

YuMe engaged Frank N. Magid Associates to develop custom research study. The statistics presented in
this report were generated from data collected between May 24 and June 4, 2012 from an online
survey of viewers. The survey was conducted from a sample group of 736 connected TV consumers
about their experiences with Internet-based video and content displayed on a TV screen.

The margin of error for the results, according to my calculations, would be around 3.61%.

The viewers, between 18 to 54 years of age, use Internet video or content on a TV screen connected
to the Internet via game consoles and Blu-ray players, as well as streaming devices directly
connected to the Internet such as Roku, Apple TV, Boxee, or Smart TVs. The number of households
connecting their TV screens to the Internet represents 30 percent of Internet-connected households.

According to the survey:

Connected TV survey respondents are young, skew male, and are ethnically and racially diverse; but 93% of them represent multi-member households of families of two or more.

Demographics of Connected TVs

It turns out that the mean age of those with connected TVs is 34 and 58% are men with nearly half being non-white (44%). Just 7% live alone, so that means the households have multiple viewers and these results are simply based on those who replied, not all of the people in the households. The report says they broke the respondents into four groups: gamers, movie fans, entertainment junkies and trendsetters.

The major device to connect the TV to the Internet? Yep, the game console. Other devices were all at about one-third of respondents or less.

For clarification, that is 28% that only use a game console and 43% who attach another device to the game console.

Advertising on Connected TV

According to the survey, it seems that nearly 90 percent of connected TV users remember seeing ads either before or during the content they want to watch. Six out of ten were able to recall seeing a pre-roll while viewing content on a connected TV. Just 13% said they didn’t recall any ads at all when “watching video, TV Shows, or movies from the Internet on a TV screen.” Clearly there’s still some ad blindness or they watched very little Internet video.

The respondents were allowed to choose more than one option above.

In terms of what types content was preferred, ad-supported won out for short-form and streaming TV while monthly subscription edged it out for streaming of movies. That makes complete sense. We are used to ads playing against short-form online video as well as TV so it would still, ideally, be the way to get that content. Meanwhile, we generally want the films to not be interrupted, especially if a newer release so a monthly subscription is the logical choice there as well.

The really interesting thing here, is the complete distaste for pay-per-view. In none of the categories did it get much more than 20% and for streaming TV, it didn’t even get that. Clearly, viewers understand that short-form should be ad-supported, streaming TV should be ad-supported, but would accept a monthly subscription and streaming movies need to be on a subscription plan.

Aside from not wanting movies broken up my ads, I think the other thing viewers know, is that a subscription plan for movies will, ultimately, be a better deal than pay-per-view.

Conversely, the report shows that viewers don’t want the viewing experience interrupted by ads, but would rather watch them at the front or back-end of the content. The most popular applications for watching video are Netflix and YouTube, with Hulu and Amazon Instant Video a distant third and fourth, respectively.

High Ad Interaction on Connected TV

The survey also found that interaction rates with advertising on connected TV could be quite high, almost 70% of respondents stated they are likely to interact with them. On top of that, about 19% converted to a purchase of a product they saw advertised on the connected TV. If you could get that kind of conversion rates on other forms of advertising, your business would be exploding.

Additional interaction rates included 32% who said they are likely to “like” or follow a brand or product, 26% would interact for more information, 24% are likely to interact to see a website with more info on the TV screen.

So what this also means now, for brands and advertisers, is that you need to have a TV-optimized version of your site for these users. Not surprisingly, the least favorite interaction type was the ‘push a button to have someone call me with more information.’ I think that in this digital, online, interactive era, we don’t need people to call us and pitch us products. We would rather be able to get the information at our own pace instead of a hard sales pitch.

For example, I recently inquired about some local digital media classes. I got no less than 15 calls about it, even after I tried to explain to them that I have work to get done during the day. This included five calls in a single day. That’s not what I expect when I fill out a web form and therefore after I answered the first call, I ignored the rest until they stopped calling.

On the flip side of all this interactivity, is the fact that 34% of of the respondents said they are not likely to interact with the ads, or rather not likely to do any of the listed interactions. It could be a problem of the question phrasing or it could be advertising-apathy on the side of the viewers. It did ask them which they are most likely to do.

In regards to what they actually did, numbers are a bit lower, including those who did nothing. Still, the interaction rates ranged in the 20-30% range for all interactions, including telling friends about information they gleaned from an ad.

That’s a Wrap

So it seems that connected TV advertising experiences need to be robust and offer more information at the click of a button. They need to not interrupt the viewing experience and they should definitely offer social interaction as in a “like” on Facebook or share on Twitter button. If it’s for a product it should definitely have options for buy now online or a store locater for local purchasing. There should also be some social sharing functionality.